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Virtu Financialis a High Frequency Trading (HFT) firm and is a Zacks Rank #1 (Strong Buy). The company just reported a solid quarter. Let's take a look at why this stock is The Bull Of The Day.
Description
Virtu Financial provides market making and liquidity services through its proprietary, multi-asset, and multi-currency technology platform to the financial markets worldwide. Virtu Financial was founded in 2008 and is headquartered in New York, New York.
Earnings History
The last two quarters were really good, but the two preceding those were pretty soft.
The most recent quarter saw EPS of $0.22 and that was $0.09 ahead of estimates for a positive earnings surprise of 69%.
The report before that was a 60% positive surprise, just off a much smaller basis. Before that, there was a 43% miss and an 11% miss before that. So the earnings history isn’t the best, but it is far from the worst seeing as the last two beats were really strong.
Estimates
So this is a Zacks Rank #1 (Strong Buy) yet I only see 1 revision higher for this year and next year over the last 60 days. That could also speak to the lack of coverage on this name. In any event, the Zacks Consensus Estimate for 2018 has moved from $0.87 90 days ago to $1.11 60 days ago and then to $1.59 which is where it stands right now. Those are some big moves and thanks in part to the good earnings release.
Valuation
I see VIRT trading at 21x forward earnings and this multiple is hard to compare to financials. That is because most of VIRT is based on the idea of it being a tech company. The revenue growth of 70% from the previous quarter and 169% from the year-ago period tell me that this HFT can handle the volatility that has come about in a big way.
The price to book is over 5x and price to sales is over 6x, both measures are high anyway you look at them. I think this stock runs, as volatility is here to stay for the time being. Trump can be both good and bad for stocks, and that recipe makes VIRT a must own.
Empire State Realty Trust is a Zacks Rank #5 (Strong Sell) and sports an "F" for both its Value and Growth Style Scores. Today, ESRT is the Bear Of The Day, so let's take a look at why that is the case.
Description
Empire State Realty Trust, is a real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world's most famous building. Headquartered in New York, New York, the Company's office and retail portfolio covers 10.1 million rentable square feet, as of December 31, 2017, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio.
Earnings History
Whenever I see a Zacks Rank #5 (Strong Sell) I look at the earnings history for a clue as to why it holds the lowest Zacks Rank. In the case of ESRT, I see a recent meet, a miss and two beats.
That is not the worst earnings history I have ever seen and hardly enough of a reason for the stock to be the Bear of the Day.
Estimate Revisions
The core of the Zacks Rank is driven by estimate revisions. ESRT has revisions of late and most are negative.
I see the Zacks Consensus Estimate for 2018 moving from $1.02 to $0.93 over the last 90 days.
Similarly, the Zacks Consensus Estimate for 2019 has moved from $1.06 to $0.95.
That downward pressure has caused the Rank to slide in an environment when most stocks are seeing earnings estimate rise.
At the same time, I see things to like here for ESRT. Revenue for the 2018 year is expected to be $487.7M and that number grows to $500.3M next year. Say what you will, but I am all about revenue growth.
Additional content:
Avoid Chinese Trade War Concerns with These 3 Retail Stocks
The U.S. and China inched closer to a possible trade war after the Trump administration threatened to impose tariffs on $50 billion worth of Chinese imports on Tuesday night. The Chinese have since responded in kind, and investors are now seemingly more worried than ever about market-wide repercussions. But fashion based retail is one area of the U.S. economy that might be able to stay above the fray.
The Trump administration announced possible 25% tariffs across 1,300 categories and products, in a move that escalates recent tensions between the world’s two largest economies. Notably left off Trump’s latest tariff proposal are retail staples from shoes to clothing. This means that some U.S. retailers could avoid a trade war-induced downturn.
Clearly, most investors hope a compromise can be reached before competing Chinese and U.S. tariffs are imposed. But it never hurts to prepare for the worst.
With that said, let’s take a look at three shoe and clothing heavy retail stocks that might be able to come out of any possible trade war unscathed.
1. Dillard's
This department store chain operates around 300 stores around the U.S. and saw its comparable store sales climb by 3% last quarter. Dillard’s revenue growth amid the shifting retail market is notable, but the company’s ability to turn a profit going forward might excite investors even more.
Dillard’s has seen its first quarter consensus earnings estimate climb by $0.48 in the last 60 days, based on upward earnings estimate revision activity. Our current Zacks Consensus Estimates are now calling for Dillard’s earnings to surge by nearly 29% to reach $2.73 per share. This bottom line expansion is projected to continue for the rest of the year.
The retailer’s fashion-based business should also be able to keep running smoothly if a trade war were to break out. Lastly, Dillard’s is currently a Zacks Rank #1 (Strong Buy) and rocks an “A” grade for Value and a “B” for Growth in our Style Scores system.
2. Burlington Stores
Burlington’s growth has been notable at a time when e-commerce has forced many brick-and-mortar retailers to close. The company posted strong comp sales growth last quarter and is projected to see its first quarter revenues climb by 10.7% to reach $1.49 billion.
Investors will also be happy to note that Burlington’s bottom line is expected to expand by 48% in Q1 to reach $1.08 per share. Looking even further ahead, the department store is projected to see its EPS figure grow at an annualized rate of 18.7% over the next three to five years.
Burlington is currently a Zacks Rank #2 (Buy) that has experienced a slew of Q1 and full-year earnings estimate revisions, with almost complete agreement to the upside, over the last 60 days. Furthermore, Trump’s new tariffs will try to avoid U.S. shopper backlash, which is great news for this footwear and clothing-focused off-price retailer.
3. Macy’s
Macy’s Forward P/E of 8.2 compares favorably to its industry’s 10.4 average and offers even better value than it did just a month ago due to the recent market-wide selloff. This industry bellwether has also traded at a substantial discount to the “Retail - Regional Department Stores” average for more than a year, as it fights its way back through a series of digital sales innovations.
Looking ahead, Macy’s Q1 earnings are projected to surge by 50% to hit $0.36 per share, while revenue is expected to climb at a more modest rate. Meanwhile, with a beta of 0.75, Macy’s is theoretically 25% less volatile than the market average, which is great for investors in search of stability amid this recent bearish turn.
Macy’s is currently a Zacks Rank #1 (Strong Buy) that has earned seven upward earnings estimate revisions for its full-year, all within the last 60 days. The retail giant is also far less likely to suffer tariff related business setbacks as these proposed tariffs take on goods such as dishwashers and televisions.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Virtu Financial, Empire State Realty Trust, Dillard's, Burlington Stores and Macy's highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 5, 2018 – Zacks Equity Research highlights Virtu Financial (VIRT - Free Report) as the Bull of the Day, Empire State Realty Trust (ESRT - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dillard's (DDS - Free Report) , Burlington Stores (BURL - Free Report) and Macy’s (M - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Virtu Financialis a High Frequency Trading (HFT) firm and is a Zacks Rank #1 (Strong Buy). The company just reported a solid quarter. Let's take a look at why this stock is The Bull Of The Day.
Description
Virtu Financial provides market making and liquidity services through its proprietary, multi-asset, and multi-currency technology platform to the financial markets worldwide. Virtu Financial was founded in 2008 and is headquartered in New York, New York.
Earnings History
The last two quarters were really good, but the two preceding those were pretty soft.
The most recent quarter saw EPS of $0.22 and that was $0.09 ahead of estimates for a positive earnings surprise of 69%.
The report before that was a 60% positive surprise, just off a much smaller basis. Before that, there was a 43% miss and an 11% miss before that. So the earnings history isn’t the best, but it is far from the worst seeing as the last two beats were really strong.
Estimates
So this is a Zacks Rank #1 (Strong Buy) yet I only see 1 revision higher for this year and next year over the last 60 days. That could also speak to the lack of coverage on this name. In any event, the Zacks Consensus Estimate for 2018 has moved from $0.87 90 days ago to $1.11 60 days ago and then to $1.59 which is where it stands right now. Those are some big moves and thanks in part to the good earnings release.
Valuation
I see VIRT trading at 21x forward earnings and this multiple is hard to compare to financials. That is because most of VIRT is based on the idea of it being a tech company. The revenue growth of 70% from the previous quarter and 169% from the year-ago period tell me that this HFT can handle the volatility that has come about in a big way.
The price to book is over 5x and price to sales is over 6x, both measures are high anyway you look at them. I think this stock runs, as volatility is here to stay for the time being. Trump can be both good and bad for stocks, and that recipe makes VIRT a must own.
Bear of the Day:
Empire State Realty Trust is a Zacks Rank #5 (Strong Sell) and sports an "F" for both its Value and Growth Style Scores. Today, ESRT is the Bear Of The Day, so let's take a look at why that is the case.
Description
Empire State Realty Trust, is a real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world's most famous building. Headquartered in New York, New York, the Company's office and retail portfolio covers 10.1 million rentable square feet, as of December 31, 2017, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio.
Earnings History
Whenever I see a Zacks Rank #5 (Strong Sell) I look at the earnings history for a clue as to why it holds the lowest Zacks Rank. In the case of ESRT, I see a recent meet, a miss and two beats.
That is not the worst earnings history I have ever seen and hardly enough of a reason for the stock to be the Bear of the Day.
Estimate Revisions
The core of the Zacks Rank is driven by estimate revisions. ESRT has revisions of late and most are negative.
I see the Zacks Consensus Estimate for 2018 moving from $1.02 to $0.93 over the last 90 days.
Similarly, the Zacks Consensus Estimate for 2019 has moved from $1.06 to $0.95.
That downward pressure has caused the Rank to slide in an environment when most stocks are seeing earnings estimate rise.
At the same time, I see things to like here for ESRT. Revenue for the 2018 year is expected to be $487.7M and that number grows to $500.3M next year. Say what you will, but I am all about revenue growth.
Additional content:
Avoid Chinese Trade War Concerns with These 3 Retail Stocks
The U.S. and China inched closer to a possible trade war after the Trump administration threatened to impose tariffs on $50 billion worth of Chinese imports on Tuesday night. The Chinese have since responded in kind, and investors are now seemingly more worried than ever about market-wide repercussions. But fashion based retail is one area of the U.S. economy that might be able to stay above the fray.
The Trump administration announced possible 25% tariffs across 1,300 categories and products, in a move that escalates recent tensions between the world’s two largest economies. Notably left off Trump’s latest tariff proposal are retail staples from shoes to clothing. This means that some U.S. retailers could avoid a trade war-induced downturn.
Clearly, most investors hope a compromise can be reached before competing Chinese and U.S. tariffs are imposed. But it never hurts to prepare for the worst.
With that said, let’s take a look at three shoe and clothing heavy retail stocks that might be able to come out of any possible trade war unscathed.
1. Dillard's
This department store chain operates around 300 stores around the U.S. and saw its comparable store sales climb by 3% last quarter. Dillard’s revenue growth amid the shifting retail market is notable, but the company’s ability to turn a profit going forward might excite investors even more.
Dillard’s has seen its first quarter consensus earnings estimate climb by $0.48 in the last 60 days, based on upward earnings estimate revision activity. Our current Zacks Consensus Estimates are now calling for Dillard’s earnings to surge by nearly 29% to reach $2.73 per share. This bottom line expansion is projected to continue for the rest of the year.
The retailer’s fashion-based business should also be able to keep running smoothly if a trade war were to break out. Lastly, Dillard’s is currently a Zacks Rank #1 (Strong Buy) and rocks an “A” grade for Value and a “B” for Growth in our Style Scores system.
2. Burlington Stores
Burlington’s growth has been notable at a time when e-commerce has forced many brick-and-mortar retailers to close. The company posted strong comp sales growth last quarter and is projected to see its first quarter revenues climb by 10.7% to reach $1.49 billion.
Investors will also be happy to note that Burlington’s bottom line is expected to expand by 48% in Q1 to reach $1.08 per share. Looking even further ahead, the department store is projected to see its EPS figure grow at an annualized rate of 18.7% over the next three to five years.
Burlington is currently a Zacks Rank #2 (Buy) that has experienced a slew of Q1 and full-year earnings estimate revisions, with almost complete agreement to the upside, over the last 60 days. Furthermore, Trump’s new tariffs will try to avoid U.S. shopper backlash, which is great news for this footwear and clothing-focused off-price retailer.
3. Macy’s
Macy’s Forward P/E of 8.2 compares favorably to its industry’s 10.4 average and offers even better value than it did just a month ago due to the recent market-wide selloff. This industry bellwether has also traded at a substantial discount to the “Retail - Regional Department Stores” average for more than a year, as it fights its way back through a series of digital sales innovations.
Looking ahead, Macy’s Q1 earnings are projected to surge by 50% to hit $0.36 per share, while revenue is expected to climb at a more modest rate. Meanwhile, with a beta of 0.75, Macy’s is theoretically 25% less volatile than the market average, which is great for investors in search of stability amid this recent bearish turn.
Macy’s is currently a Zacks Rank #1 (Strong Buy) that has earned seven upward earnings estimate revisions for its full-year, all within the last 60 days. The retail giant is also far less likely to suffer tariff related business setbacks as these proposed tariffs take on goods such as dishwashers and televisions.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.